Infinite Economy

“There are at least two kinds of games. One could be called finite, the other infinite. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing play.”

This is the first chapter of “Finite and Infinite Games” by James P. Carse. I highly recommend this book. It has been in publication since 1986, which certainly says something.

Since I have read this book several times over the years and absorbed some of its ideas into my thinking, I might borrow from it unconsciously as I write. I have no intention of peddling any of Professor Carse’s ideas as my own; to the best of my recollection, I am only riffing on them.

While I do not agree with the entire thesis of “Finite and Infinite Games,” it has been a source of diverse insights for me. Lately, I find myself reasoning about our concept of “the economy” from the simple premise in chapter one.

We have assumed for generations that economic competition is unambiguously good. Competition is efficient. Competition drives innovation; producing better goods and services at lower prices. Competition is the basis of a healthy economy.

Interestingly, all of the corporate actors engaged in economic competition are structured as cooperative entities; many with mission statements, guiding principles, codes of conduct, and team-building exercises. Historically, discipline was enforced ruthlessly on pirate ships, which are otherwise thought to be the very definition of lawless enterprises.

Social Darwinism might argue that successful cooperation, such as the astonishing cooperation of cells and organs within the bodies of complex organisms, is the result of competition those organisms face in their environments. As such, there is no contradiction between competition and cooperation, rather they represent a productive tension. It might be “natural” for internally cooperative businesses to compete externally against other businesses in a “dog eat dog,” “survival of the fittest,” “eat what you kill,” “winner take all” marketplace.

However, even if nature were nothing but a grim crucible in which the consequences of adaptive failure were individual death and species extinction, the outcome of competition and natural selection throughout the historical record has always been to increase the number of players in the game and to continue the play. Despite five mass extinctions, life on Earth has shown an imperative to diversify and proliferate as, essentially, an infinite game.

In contrast, the economy is becoming a finite game that some actors are “winning.” These actors are accumulating wealth and power, gaming the marketplace, subverting regulatory processes, reducing competition, and, ultimately, eliminating players from the game. Economic activity might be diversifying and proliferating, but the benefits of that activity are concentrating in fewer hands. Furthermore, the impact of human economic activity on the natural world is causing the sixth mass extinction as we outcompete all other species.

Competition is not unambiguously good. Competition is constructive when it raises the level of play in the game. Competition is destructive when it excludes players from the game; bringing their play to an end.

Within a theater troupe, there might be fierce competition for the lead roles. However, once this competition is decided, the actors to whom the minor roles were given are not expelled from the troupe; that would be utterly self-defeating. Rather, the show is mounted, everyone shares in the profits, and the competition – or, rather, collaboration – begins anew for the next production.

If we want the economy to be an infinite game, played for the purpose of continuing the play, we must embrace collaboration. The goal is to raise the level of play in the game; not to create winners at the expense of losers.

If we want the economy to be an infinite game, played for the purpose of continuing the play, we must accept that it occurs in a finite ecosphere. Ironically, and perhaps tragically, our concept of the economy embraces the infinite only in the notion of endless growth.

If we want human civilization to be an infinite game, played for the purpose of continuing the play, then we need an economy that is an infinite game until, perhaps, we no longer need an economy at all.

Currently, we are playing the economy as a finite game that we might win at the expense of ourselves and the natural world.

Kevin Farmer

March 22, 2014

An interesting read about a business that might have failed due to being structured as a competitive, socially Darwinian entity rather than a cooperative one: